Anastasia Barnes recently interviewed Brian Cosentino, senior vice president, acquisitions and business development at The Wilder Companies, a Boston-based real estate firm specializing in the positioning of retail properties with proficiency in specialty centers, mixed-use developments, community centers, urban properties, and regional and super-regional malls.
Anastasia Barnes: As VP of acquisitions, how do you identify potential retail properties that align with the Wilder’s investment strategy and objectives?
Brian Cosentino: We have great relationships and an excellent transaction reputation in the markets we cover. Furthermore, we actively source acquisitions directly from property owners through our own dedicated efforts.
AB: Can you explain the due diligence process you follow when evaluating a retail property for acquisition?
BC: For due diligence, Wilder employs a multi-disciplinary team approach from our operations platform, including management, accounting, leasing, marketing and development services.
AB: What key factors do you consider during this assessment?
BC: We do a lot of homework up front prior to making an offer on a property. The due diligence process essentially verifies and confirms we are getting what we bargained for.
AB: In the ever-changing retail landscape, how do you assess the long-term viability and profitability of a retail property?
BC: At Wilder, we recommend specific, tailored retail asset strategies based on our clients’ investment risk/return profiles. We maintain constant communication with our clients, and we develop retail strategies for them based on their investment criteria. We service all investment profiles, including Core, Plus, Value, and Opportunistic strategies.
AB: What indicators or trends do you look for?
BC: Our thesis for Core and Plus investing in retail has long centered on acquiring the most dominant shopping centers in a trade area. Grocer dominance has long driven our Core and Plus strategies. We are also exceptionally focused on markets with growing populations and constraints/barriers on land. Today, our thesis for Value and Opportunistic investing in retail centers on acquiring older, well-located Class B or C retail properties that offer an attractive land basis, ie. “Covered-Land Plays.” Older retail properties can offer excellent reposition and/or redevelopment opportunities.
AB: What strategies do you employ to mitigate risks associated with acquiring retail properties, such as changing consumer preferences, economic fluctuations, or competition from e-commerce?
BC: More so than any other property type in commercial real estate, retail derives a greater share of its overall return from in-place cash flow. Strong current yields mitigate risks and offer protection in downside scenarios. With every recession, retail shows its resiliency and durability as an investment. In-place cash flow gives you the time you often need to revitalize and transform a shopping center into a vibrant retail destination.
AB: How do you approach negotiating and structuring deals for retail property acquisitions?
BC: We use a disciplined approach to negotiating deals with the goal of safeguarding our investment and protecting our downside. With respect to structuring partnerships, we offer our clients and partners flexibility. Our goal is to properly align interests.
AB: What are some key considerations and techniques you employ to ensure successful transactions that benefit both the developer and the property owner?
BC: Aligning interests with like-minded partners is essential to not only successful transactions but also long lasting, and successful relationships.
AB: How does your company approach renovations or redevelopment of existing retail spaces? Are there any specific challenges or considerations for architects, engineers, or construction managers in these projects?
BC: We seek contemporary retail merchandizing strategies and potential mixed-use component development. Older retail centers are often not highest-and-best use. We look to unearth opportunities, which may include the densification of sites with additional square feet and/or new uses, including residential, medical, hospitality, entertainment and in select locations, lab office.
AB: Could you provide insights into your company’s sustainability initiatives, or any specific requirements related to green building practices for new retail developments?
BC: Our primary focus is on creating value for all (partners, communities, and the environment, etc.). We look to green and LEED initiatives when they enhance value by providing cash flow or add to the customer shopping experience. Many of our properties have solar panels, EV charging stations and have been retrofitted with LED lighting. Our management team works diligently with all parties to push the boundaries of what is possible and best to achieve better solutions for our communities and environment.
AB: In terms of project timelines, what is the typical duration from initial acquisition to completion of construction for your retail properties? Are there any specific factors that may affect the construction schedule?
BC: Revitalizing and transforming shopping centers into vibrant destinations takes time, typically 3-7-year horizon. Existing shopping centers can have numerous and complex encumbrances. Also, municipal entitlement processes take time. Wilder has a long and successful track record of unlocking value through re-entitling properties. Working with communities on solutions for redevelopment is time intensive.
AB: What type of collaboration and communication do you expect between your team and the architects, engineers, and construction managers involved in your retail projects? Are there any preferred project delivery methods or platforms for effective coordination?
BC: Yes, we work in a collaborative way with our existing engineering relationships and maintain an open dialogue from the very beginning of an acquisition process. Identifying concepts and repositioning strategies early in the process increases the chance to be successful.